Design 21: Social Design Network

http://www.brookings.edu/blogs/up-front/posts/2013/02/14-europe-help-education-winthrop On January 23, the European Union’s financeministers unanimously endorsed Financial Transaction Taxes (FTT) by giving a green light to 11 eurozone countries to impose a coordinated tax on financial transactions – an act filled with potential not just for national budgets, but overseas development assistance as well. Such taxes may or may not eventually cross the ocean to U.S. markets, but as the group of nations that include the eurozone’s four biggest economies (Germany, France, Italy and Spain) begin to negotiate the tax’s rate and design, policymakers should consider the possibility of using even a small percentage of the revenues gained to provide a new source of development finance–money that can change the world. The animating force behind the idea is to skim “excess” revenue from the financial sector to repair national budgets severely strained in the aftermath of the global financial crisis, thus holding financial institutions accountable for their role in causing the recession. An additional benefit cited by the tax’s supporters is it would place some constraints on the increasing volume of high-frequency trading that has at times threatened the stability of financial markets. The nation at the forefront of the FTT movement is France, which passed a 0.2 percent tax on financial transactions in 2012. At the U.N. General Assembly in September of that year, French President Francois...